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Ireland was a net contributor to the EU budget in 2018

Ireland was a net contributor to the European Union budget to the tune of €315m in 2018, according to the latest report by the EU’s financial watchdog.

The sum represents an increase from €173m in 2017 and €181m in 2016.

However, officials expect Ireland’s budget contributions to rise further in the event of a no-deal Brexit, if member states insist on meeting the EU’s current spending ambitions.

The 2018 annual report by the European Court of Auditors shows that Ireland received €2.6bn in EU funding, with the vast majority coming in the form of farm subsidies.

Of €1.56bn in overall agriculture receipts, some €1.22bn was received by way of direct payments, and €319m in rural development funds.

Overall, the report says EU spending in 2018 amounted to €1.56bn. This represents 2.2% of the total government spending of EU member states and 1% of EU gross national income (GNI).

The annual audit says the estimated error rate in member states receiving and disbursing funds was 2.6%, compared to 2.4% in 2017 and 3.1% in 2016.

Officials from the Court of Auditors say they cannot estimate the impact of a no-deal Brexit on the EU’s accounts, since they can only audit after such an event has occurred.

Estimates vary as to the hole in the EU’s budget if the UK leaves without a deal and declines to pay its outstanding liabilities incurred during membership.

In a post for the Brussels-based think tank Bruegel, economist Zolt Darvas estimated that, had the UK left without a deal at the end of March, the total Brexit hole in the budget until 31 December 2020 would have amounted to about €16.5bn, or 0.066% of the EU27 GNI.

Under the Withdrawal Agreement, the UK would have been expected to pay around £39bn STG to meet its current and future liabilities.

However, the longer the UK stays in the EU, the higher those liabilities will become.

In April, the EU adopted emergency measures that would allow the UK beneficiaries to still receive EU funding for research and agriculture in the event of a no-deal Brexit.

This would be for contracts already signed and decisions made before the Brexit date, so long as the UK continued paying its contribution agreed in the EU budget for 2019.

Officials from the Court of Auditors believe that all member states, including Ireland, would have to pay more if the UK does not honour its liabilities in a no-deal scenario.

In a note to the Finnish presidency of the EU, reported by Politico, the German government said it would seek an increase in EU spending of no more than 1% of GNI over the seven year period.

“Losing the UK as one of the largest net contributors to the MFF (Multi-annual Financial Framework) means that even with this limit, contributions of the remaining Member States will increase significantly,” the note said.

However, officials from the Court of Auditors point out that member states have also demanded that the EU increases spending in the areas of security and migration.

The MFF, which is the EU’s seven year budget cycle, sets out spending plans and commitments from 2021-2027.